Commission adopts legislative proposal to end coal aid

Last month the competition department of the European Commission drafted a proposal to allow MS to maintain subsidies to the hard coal industry until 2023, which was widely considered to contradict the EU’s pledge to phase out fossil fuel subsidies.

On July 20th, the Commission adopted a proposal for a Council Regulation on State aid to facilitate the closure of loss-making hard coal mines in the EU by 1st October 2014. According to the Commission’s press release, any further operating aid to the sector will be conditional on the presentation of a closure plan for the loss-making mines.

 “The aim of the proposal is to ensure a definitive closure of uncompetitive mines by 1st October 2014. There should be no doubt about this,” said Joaquín Almunia, Commission Vice President in charge of competition policy during the press conference.

 “The Commission will only allow operating aid to mining companies that have a closure plan and the subsidies should go increasingly towards supporting the social and environmental costs of doing so,” he continued.

The proposed Regulation will have to be adopted by the EU Council of Ministers by qualified majority.

It is now imperative that Member States do not water down the Commission’s decisive move towards phasing out uncompetitive and environmentally damaging hard coal mining.

Read the Commission press release here and access further background information here.